3 Ways Advisors Can Look at Technology

financial advisor tech

During our Excell conference in May, keynote and futurist Howard Tullman made this astute observation: “Today, the rate of change is the slowest it’s going to be for the rest of our lives,” he said. Let that sink in. In every industry, including ours, a snowball effect is occurring. The technology coming out next month and next year is already accelerating the next, next stage of change and the next, next new norm. The future won’t look incrementally different, Tullman hypothesized, it will look radically different. What does that mean for the average advisor? It means the pace of change inside of their firm has to be faster than outside of their firm. Focusing on how technology can enhance the client experience is no longer an option; it’s a crucial component in your business strategy.

Ben Mathis, Carson Group’s CIO, recently hosted the Talking Tech webinar, in which he discussed leveraging technology to grow. As far as he’s concerned, advisors have three options to keep up with rapid change – Buy It, Build It or Partner. While he answers many of the pressing questions regarding these three approaches below, our goal is to leave you with one question left to consider: Which approach is going to bring success to your firm?  

Buy It

Buy It is to use off-the-shelf solutions to meet technology needs. There is little customization and limited integration with this method, making it a complicated option. Additionally, ongoing maintenance may or may not be included by the vendor.

In what type of firm do you think the Buy It approach is most applicable? Utilizing tech solutions offered by third party companies is appealing to those firms that don’t want to deal with the ongoing expense/maintenance of a custom-developed platform or those that don’t have the in-house expertise to accommodate custom software development and integrations.

In your opinion, what is the bare minimum tech an advisor needs? Is there a difference in what growing firms need vs. what lifestyle practices need? No matter the size or style of the firm, I think it’s important to start with the client experience and work backwards from there. What is needed to attract and retain clients? What would you expect from the professionals you work with? What makes the lives of your staff/clients easier? Answering questions like these helps you determine your “minimum.” Overall, however, three key areas to address are: client access, back office systems that support client service functions and web presence.

Often, advisors purchase multiple tech solutions because there doesn’t seem to be one that does it all or because instituting best-in-class products means they have to forgo bundling. How complicated is integration of these different solutions produced by different providers? Many integrations are currently point and click, but they may provide a less-than-ideal integration model. These enable some data flow between applications, but problems with flexibility and compatibility occur on a regular basis. To get complete integration, custom development is needed. This equates to more time and money.

What should be the process for vetting tech that you are interested in purchasing? I recommend utilizing a formal request for proposal process to be able to compare solutions head-to-head, as well as to document the business needs of the solution. Asking for references, talking to other advisors and attending industry events are other worthwhile activities which will keep you up-to-date with what’s going on in the fintech space.

How often does an advisor who purchases their tech need to reevaluate the market to see if there is something better out there? It’s not really the answer many advisors want to hear, but evaluation should occur constantly. The entire team should be involved and offer input, giving particular precedence to those who are in the systems day in and day out. If there is an opportunity to do things better, don’t hesitate to change it up. Your competitors won’t.

What’s your advice to an advisor who doesn’t know the first thing about technology but wants to start piecing together their tech stack? Network with those in the industry who you feel have put together great tech stacks and/or hire consultants or stakeholders that can guide and inform you. Also, proceed cautiously. Without expertise and perspective, technological debt can be inadvertently created.

Build It

Build It is a DIY approach. You are 100% responsible for the research, build, customization, integration and ongoing maintenance of your technology solution. This can be very pricey. You do, however, maintain full control.

In what type of firm do you think the Build It option is best used? Many large firms choose the Build It route due to their ability to scale and their need for proprietary systems which complement their complexity. Firms that require solutions that are 100% in line with their specific way of conducting business often need to pursue this path.

What do you think is the driving force behind these advisors wanting to build it themselves? Simply, it’s the desire to be in complete control of the technology. Building is advantageous because it allows the firm to determine from top to bottom what the client experience and back office procedures look like.

Can you estimate what it would cost for an advisor to build a customized tech solution? When is it worth the price? It really depends on how much of the solution is custom. Without sugar coating it, though, the number is in the millions of dollars, not including the price of ongoing maintenance. Every situation is unique, but it generally becomes a good investment when your desire for control outweighs your fears of cost. Another thing advisors need to be aware of in terms of the money they are putting into technology is the Build It method’s overall effect on growth. Earlier this year, Ron shared this #Ronsense which discusses how tech spending can become a distraction, taking advisors away from nurturing their relationships with clients and from rainmaking. At a certain size, it’s just not worth it.

What kind of time commitment is building your own system from start to finish? If done thoughtfully, a build will take quarters or years, not mere months. This isn’t accounting for the hours you’ll need from your own human capital resources along the way and afterwards.

How do you go about finding a development team who can create exactly what you are envisioning? This is similar to finding and selecting a Buy It software solution. First, talk with others who have executed with outside developers in the past and seek recommendations. Then, once engaged with a development partner, ask for examples of their work and speak with their customers. You’ll be investing a lot of money, so you want to do your due diligence. Finally, leverage programmers that use agile software development methods, as this will allow you to build in small increments and iterate from there.

How is upkeep different with a Build It approach? Upkeep is very different because the burden is on the firm to maintain the application. Updates and upgrades to operating systems and browsers can cause applications to need continual maintenance to function. My advice is to work with developers who stay ahead of these things to save yourself a ton of headaches.


Partnering is essentially plugging into a larger platform that does the research, building, customization, integration and maintenance for technology solutions. Through Partnership, you also have access to a whole host of other business solutions, along with technology. Partnering could occur with a broker/dealer, aggregator, OSJ or other organization.

When you talk about Partnering, what does that mean? How is it different from the other two options? This can be a hybrid of buying and building. In the Partner world, the firm is able to be more of an integrator, instead of producing 100% custom development. This also enables a smaller firm to benefit directly from the additions and upgrades that the strategic partners make to their platform.

Overall, what is a major benefit to Partnering? One of the biggest rewards is that the advisor can get back to being a CEO, rather than running a software company (Build It) or not having control of the client experience (Buy It). We’ve found most advisors prefer to spend their time growing a business and serving their clients. Partnership provides a simple path to get there and to enjoy the journey along the way.

What type of firm is ideal for the Partnering option? Partnering can work for firms of all sizes. It’s a way that advisors can get the best of both worlds. At a deep level, it allows the advisor to scale quickly without the associated costs and distractions of becoming a software creator.

How do advisors remain in control of their process while alleviating the problems of Building It or Buying It? Successful advisors have built their businesses through defining a process and following it. When looking to Partner – in general and in tech – it is important to choose someone who is committed to finding ways to enhance your process, rather than defining that process for you. Too often, technology vendors force advisors to adhere to their technology process.

Does Partnering require advisors to give up ownership of their data? Data is the most important currency in our industry. Why give up your most valuable currency to be tied to a technology platform you do not control? I can only speak for Carson Group, but as a Partner, we are constantly looking for ways to enhance your and your clients’ experience through new technology, while still placing precedence on you owning the data.

What sort of input does a Partner have in the technology that is added to the tech stack? In an ideal world, a lot! Bottoms up innovation with top down implementation is our slogan at Carson Group. This encourages us to collect the ideas voiced by 100+ Partners across the country and then create solutions to the complex problems they present.

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